The present disclosure relates generally to a method of, and a system for, preventing unauthorized products from being sold on online sites.
Anti-counterfeiting is a worldwide industry impacting all transactions involving products and/or services. Consumers normally find it difficult to distinguish between authentic and fake transactions. The reason that counterfeiting continues unabated is that there is no easy way to distinguish a genuine transaction from a counterfeit transaction.
Distinguishing genuine transactions from counterfeit transactions are even more difficult for products and/or services bought from online shopping sites. Online shopping allows consumers to purchase products and/or services directly from a seller over the internet. An online store or virtual store provides the convenience of buying products and/or services anytime in privacy, without facing any crowds in retail stores while also allowing price comparisons. This process is called business-to-consumer (B2C) online shopping. Similarly, when a business buys from another business, it is called business-to-business (B2B) online shopping.
It is estimated that more than 85% of the world's online population has used the internet to make a purchase. This is about $75 million people, up 40% in the last two years. However, assuring the authenticity of the transactions bought through internet sites is a daunting challenge.
Typically, an online store only provides pictures, text, multimedia files, and/or descriptions of products for sale to a consumer when shopping online. Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer's specifications. Sometimes, written and video reviews are available from consumers who have purchased similar products in the past from the same internet site. However, these reviews are subjective and based on personal preferences that may not reflect end-user satisfaction once the product has been received by a new consumer. These sites may also feature a long list of “personal testimonials”, without sufficient information to verify them.
Dishonest online shopping sites trick the consumer by creating a legitimate-looking site and using effective marketing. The products from these sites may never be shipped, turn out to be fake, be of substandard quality, be stolen, or be unauthorized branded products. Dishonest shopping sites bring a bad name to legitimate online shopping sites. Sometimes, a legitimate site may also be tricked by other supply chain partners into believing that the products being supplied to them for sale on their site are genuine and authorized by the brand owner even when they are not. Given the lack of ability to inspect merchandise before purchase, consumers are at a higher risk of fraud on the part of the merchant than in a physical store. Although the benefits of online shopping are considerable, it can create a difficult situation for ascertaining the authenticity of products bought from online sites.
Consumers typically provide their credit card information to these sites and are left with few options if the product turns out to be counterfeit. Credit and consumer protection laws in many countries hold the credit card company liable to refund their customers' money for products or services purchased with the card that were not delivered. The credit card company then has to absorb the loss. However, if a product was delivered, but turns out to be a fake, then the consumer's options are limited. Returning the product may be difficult, because the online site may have disappeared and/or the return address may not be valid. Internet fraud is not limited to products or products only. It may also include services, such as tickets to sought-after events such as concerts, shows, sports events, etc.
Legitimate companies attempt to provide peace of mind to consumers by deploying various approaches, such as quality seals on the webpage if it has undergone an independent assessment and meet all the requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of the online shoppers. The existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent. Most large online corporations continue to invent new ways to make fraud more difficult; however, the criminals are constantly responding to these developments with new ways to manipulate the system.
Securing products, packages, and shipments from authorized manufacturing sites of brand managers to online sites, and finally to end customers, is therefore of paramount importance due to counterfeiting and diversion of products in the supply chain. Companies try various methods to assure the integrity of their supply chains. Some of these methods deploy security seals, wax seals, markings of various kinds, trusted and authorized distributors and trusted online sites, cryptographic certificates, mechanical and electronic means, radio frequency identification (RFID)-based solutions, barcode-based systems, and computer-based systems to assure supply chain integrity and security. However, counterfeiters, thieves, product diversion entities, and product overflow companies have also become quite sophisticated in circumventing these security approaches.
Brand owners these days have their products manufactured in different parts of the world. Some of their products are manufactured in their captive locations, some are outsourced or subcontracted to contract manufacturers, and some are produced under a license by third parties. Sometimes, some of these subcontractors produce more than the quantity requested by the brand owners. The additional products produced in this manner are then distributed through unauthorized/illegal channels to online sites, depriving brand owners of their revenue and profit.
Product diversion is another vehicle used by dishonest online sites to acquire unauthorized products to sell on their sites. Product diversion may take place during the distribution of products on a global scale. For example, brand owners may want to increase their sales in untapped countries and emerging economies. The prices they charge in these markets are substantially lower than the prices in their established markets. Some unscrupulous companies who specialize in export diversion buy branded products intended for untapped foreign markets at deep discounted prices. They may then divert these products onto online sites for sale in established markets at a significant profit and, in turn, deprive the brand owner of their revenue and profit. For example, pharmaceutical products intended for a poor country can be diverted onto online sites located in any part of the world and sold in a country where the price may be much higher.
Theft is another problem of importance. Vans and trucks carrying high value goods, such as expensive apparel, alcohols, and accessories are often hijacked. Their contents may then be split and delivered to dishonest online sites without any trace.
Counterfeit products comprise yet another major problem. Counterfeit products may appear at online sites in multiple ways, and it will be difficult for the brand owners to find out where the counterfeit shipments and products are coming from, and how they get to the online sites. Even the honest freight consolidators, central distributors, and regional distributors have no way to know if the shipments and products that they received for further movement within the online supply chain are really authentic.
Finally, when consumers purchase a product from an online site, they cannot physically see the product before buying, and thus have no way to know whether the product that they bought online is authentic or fake. If a consumer bought a product believing the product to be authentic, and then attempts to return the product to the brand owner if not satisfied, and if the brand owner refuses to accept the product, then it causes consumer frustration.
The criminals have now started buying real advertising space and advertising on popular and trusted websites, such as eBay and Google, where large amounts of money are paid for prime placement. If a consumer types a product name in the search bar of a search engine, then the consumer will get a large number of sites displayed selling that product. Clicking the product names on any of these websites all looks legitimate.
The fake sites normally will scrape the brand owner's site and copy all of the available information about the product from that site such as photographs, text, specifications, features, marketing material, and even executive photographs to display on their site. There is no easy way to distinguish between a site selling fake products and another one selling real branded products. Just like consumers, the search engine companies, or auction websites, etc., also have no easy way to distinguish between these sites, and therefore cannot stop them. Even if they stop them when discovered, these sites reappear shortly thereafter in another form. It becomes a never-ending game. Criminals have multiple accounts with which to operate. Sites selling multiple brand products also cannot distinguish between the genuine products and the illegal products displayed on their websites.
The search engine and auction website companies use a combination of manual and automated processes to weed out illegal companies. In 2011, it was reported that approximately 95,000 advertisers for counterfeit goods were shut down. However, these companies morph into another form and reappear. Just because a product is placed at prime placement in a search, and looks real, does not mean that it is. As an example, it is estimated that about 5% of the 4.5 billion prescription medications used in the U.S. are counterfeit and are generally purchased by consumers online. Law enforcement also cannot keep up with the flood of fake sites, because these companies may be located in another country.
The present technologies or approaches are inadequate in preventing counterfeiting, diversion, overruns, or theft, or in preventing illegal products from being sold at online sites. To date, both brand owners and consumers have had very limited success in tracking the authenticity of the products available from online sites in real time.
On an auction website, a consumer normally browses through the listings to buy a product. In order to assure that a product on the listing is genuine, the website may require a seller to sign an agreement that the product for sale has not been acquired through a fraudulent activity and is not counterfeit. Many sellers sign such agreements hoping that they will not be caught or caught too late in the process. Significant effort may be required to conduct an analysis of the products that are put on the auction site to determine whether the listed product is counterfeit or fraudulent. This process is time consuming and prone to error.
U.S. patent publication no. 2010/0241528 A1 discloses anti-counterfeiting measures for an online auction website. In this disclosure, a seller uploads images or photographs of a product to be sold and also enters a unique identifier for the product. A seller may also be requested to add a feature, product attributes, and other information, such as color, size, style, etc. The product's unique identifier may be alphanumeric text, a number, or an image and the associated product attributes and information that a manufacturer may have regarding the type of product. If there is a match, then the product is authentic. If it does not match, it is considered fake. However, the seller may obtain these product features for a similar product by perusal of various websites or the brand owner's website.
Accordingly, there is a critical need to have a method of, and a system for, preventing unauthorized products from being sold on online sites. The need exists for an easy way for consumers to check the authenticity of any product before it is bought on an online site, and also for an easy way for a brand owner and law enforcement agencies to track, trace, and authenticate the article of commerce sold at any online site at any time.
Skilled artisans will appreciate that elements in the figures are illustrated for simplicity and clarity and have not necessarily been drawn to scale. For example, the dimensions and locations of some of the elements in the figures may be exaggerated relative to other elements to help to improve understanding of embodiments of the present invention.
The system and method components have been represented where appropriate by conventional symbols in the drawings, showing only those specific details that are pertinent to understanding the embodiments of the present invention so as not to obscure the disclosure with details that will be readily apparent to those of ordinary skill in the art having the benefit of the description herein.